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Nonsuit vs Dismissal in a Debt Collection Lawsuit

Chloe Meltzer | March 11, 2024

Chloe Meltzer
Legal Expert
Chloe Meltzer, MA

Chloe Meltzer is an experienced content writer specializing in legal content creation. She holds a degree in English Literature from Arizona State University, complemented by a Master’s in Marketing from California Polytechnic State University-San Luis Obispo.

Edited by Hannah Locklear

Hannah Locklear
Editor at SoloSuit
Hannah Locklear, BA

Hannah Locklear is SoloSuit’s Marketing and Impact Manager. With an educational background in Linguistics, Spanish, and International Development from Brigham Young University, Hannah has also worked as a legal support specialist for several years.

Summary: When a court dismisses a debt collection lawsuit with prejudice, that marks the end of the claim for both the defendant and the plaintiff. The plaintiff cannot bring the case back to the same court nor to a higher court. Conversely, a nonsuit without prejudice is a temporary dismissal by the plaintiff.

If you are involved in a debt collection lawsuit, you may have heard a lot of different legal terms thrown around. It can be stressful and extremely confusing, especially if you do not have a lawyer to represent you.

Although hiring a lawyer can prove helpful for your defense, it is not always an affordable solution for everyone. If you are representing yourself in a debt collection lawsuit, then you need to be aware of what could happen and the actual meaning of all the different legal terms connected to your case.

In this article, we will explain the difference between nonsuits and dismissals and break down each in detail. But first, let's discuss some basic court lingo.

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Knowing these legal terms and meanings can help you win

If you are being sued for a debt that you owe, knowing all the legal jargon will make it easier for you to stay involved and make the best response possible. Here are some basic legal terms and meanings you should know when you are being sued:

  • Party: The parties of a debt collection lawsuit are the people or companies involved in the case. Most cases involve a dispute between two parties, but some cases have several parties.
  • Plaintiff: A plaintiff is the party that initiates the case. For example, if a debt collection agency sues someone for a debt they owe, the agency is the plaintiff in the case.
  • Defendant: A defendant is the person or company that is being sued in a civil case.
  • Summons: This is the legal document that starts a lawsuit. Generally, the Summons contains all the case information, including the parties, the court in which the case is filed, the case number, and the attorney information.
  • Complaint: This is another legal document that is usually delivered with the Summons. The Complaint contains all the specific claims that the plaintiff is making against the defendant. This document is also called a Petition in some states like Texas.
  • Answer: This is also a legal document that the defendant files to respond to the Summons and Complaint. It typically contains a section for responses to the Complaint's claims, affirmative defenses, and a certificate of service.
  • Affirmative defense: An affirmative defense is used by a defendant to demonstrate all the legal reasons that the plaintiff should not win the case. A common affirmative defense used in debt collection lawsuits is the statute of limitations being expired.
  • Default Judgment: If a defendant does not respond to the Summons and Complaint before their state's deadline, then the plaintiff may request a default judgment. If the court grants this request, then the plaintiff has the right to garnish the wages of the defendant and even seize their property.

This is just a starter package of legal terms that will help you navigate your debt collection lawsuit with confidence. Now, let's jump into the difference between a nonsuit and a dismissal.

The difference between nonsuit and dismissal

A nonsuit is a judgment that occurs against the plaintiff when they don't show up to court or are unwilling to continue with the case. On the other hand, a dismissal is a court order that concludes a case either voluntarily (plaintiff wants to dismiss) or involuntarily (defendant files a motion to dismiss, and it is granted).

Understanding a dismissal

A case can be dismissed with or without prejudice, and here's the difference:

  • Dismissed with prejudice: The same claim cannot be brought up in a new case in the future. In other words, the case is permanently dismissed.
  • Dismissed without prejudice: The case is dismissed for now, but the plaintiff can refile the case again in the future.

So, if a creditor or debt collector dismissed a lawsuit against you without prejudice, they may engage in further litigation against you someday. That being said, the statute of limitations still applies if a case is refiled. Federal Rules of Civil Procedure Rule 41 (a) governs voluntary dismissals in Federal court.

Rule 41 (a) allows the plaintiff to dismiss his lawsuit if the defendant (you) failed to file an Answer to a Motion for Summary Judgment. The plaintiff may dismiss a lawsuit without a court order based on Rules 23 (e), 23.1 (c), 23.2, and 66, and any applicable federal statutes if:

  • An Answer or Motion for Summary Judgment is served before a notice of dismissal is served.
  • There is a stipulation of dismissal signed by all parties.

There are only two circumstances in which dismissal is permissible if the defendant has taken such action:

  • Defendants agree to dismiss the case; or
  • Dismissal by the judge overseeing the case

A voluntary dismissal means that if the case is brought to court again, a dismissal in this second case will end the case permanently. With a counterclaim by the defendant, the case can only be dismissed if the counterclaim survives.

For example, if you wish to file a small claims case, you could voluntarily dismiss your case with or without prejudice. If you were to dismiss it with prejudice, then you would not need to go back to court if you have won or been paid.

Although, if you decided you wanted to continue and move the case to a normal court versus small claims, then you could dismiss the small claims case without prejudice. Then, you could bring the case to the regular court.

Your case could be brought to small claims and back to a regular court repeatedly. It can literally go back and forth as long as it is considered to be without prejudice. This might be a good or a bad situation for you, depending on your case.

If a judge were to dismiss your case involuntarily, it means that it goes against the wishes of one party. It is only considered involuntary when the judge decides the case can't go forward because of a legal reason. It can be dismissed with or without prejudice, but typically, this is done without prejudice.

There are several reasons a case is dismissed, including:

  • You and the plaintiff have reached an agreement, and you wish to end the case.
  • You have cleared the debt.
  • The defendant cannot be found, and the creditor wants to reserve the right to sue at a later time.
  • The creditor sued several people but pursued only one or a few, so the others were dismissed from the case.
  • The case no longer interests the creditor.

Learn about Motions to Dismiss with SoloSuit.

Understanding a notice of nonsuit

A nonsuit is a judgment against a plaintiff by which the court dismisses a case because the plaintiff lacked adequate grounds or was unwilling to continue the suit. If the court dismisses the case, it is generally with prejudice, which ends the plaintiff's right to bring the suit at a later date. However, if the plaintiff files a voluntary notice of nonsuit, and it is granted without prejudice, the plaintiff retains the right to potentially bring the suit again at a future date. Nonsuits can be voluntary when filed by the plaintiff on involuntary when it is an action taken by the court.

Different states have laws governing nonsuits. For example, in Texas, Tex. R. Civ. P. 162 allows the plaintiff in a suit to take a nonsuit any time before all their evidence has been introduced. Generally, if granted, these orders are typically without prejudice. However, Tex. R. Civ. 96 states that a plaintiff is barred from taking a nonsuit if the defendant has filed a counterclaim.

In Texas, a motion for nonsuit is typically filed by a creditor to dismiss a lawsuit. When it is filed and granted “without prejudice,” the plaintiff is voluntarily surrendering their case but reserves the right to re-file at any point before the statute of limitations expires. The rules governing a notice of nonsuit may vary from state to state.

Let's take a look at an example.

Example: Kate lives in Texas and owes $4,000 on a store card. She has defaulted on her payments, and the company eventually charged off her account and sold it to a debt collection agency which immediately contacted her about it. After no responses from Kate, the debt collection company filed a lawsuit against her. When she received the Summons and Complaint, Kate used SoloSuit to promptly file an Answer. In her Answer, she correctly asserted that the company did not provide the correct information about the account. As the plaintiff could not provide the right information because the debt had changed hands, the court issued a notice of nonsuit with prejudice. Kate no longer has to worry about the debt or the company filing a future lawsuit against her.

There is a situation when there is an unconditional right to nonsuit. This only exists if the defendant has filed a counterclaim from the same transaction as the plaintiff's claim. Here, the party that filed the counterclaim must agree with the nonsuit.

When a plaintiff has the right to a nonsuit, it means that they can opt to drop the case at any time. Regardless of if both sides have spent a lot of effort, time, and even money on the litigation of the case. This can be frustrating for one party, especially if it has been multiple years of litigation.

Essentially, if a plaintiff doesn't like the way the trial is heading, they can declare a nonsuit. This will end the proceeding until the case is refiled.

There are three main situations where a nonsuit is considered “late”:

  1. After a “motion to strike the evidence”: This is a motion for a judgment as a matter of law. Once this has been granted, the nonsuit would be considered too late.
  2. After the jury “retires from the bar”: This is when the jury has been told that the case has begun, and they leave the courtroom.
  3. After the case has been submitted to the judge for a final decision: This may be due to the case facts or based on a dispositive motion.

When is the best time to file a nonsuit motion?

In the absence of a cause of action or affirmative defense established by the plaintiff's opening statement, a defendant may move for nonsuit. The timing of a motion for nonsuit is crucial, especially when one is attempting to get out of a lawsuit. If one of the defenses was valid or the creditor lacked enough evidence, the judge may decide to sign an order to dismiss the case with prejudice.

In an arbitration scenario, the defendant may elect to submit their motion immediately after the plaintiff's opening statement is complete. According to Code of Civil Procedure section 581 (a), the defendant may not move for judgment without waiving their right to offer evidence if the motion is not granted.

Nonsuit motions are made orally, but a party may consider submitting a written motion simultaneously with making the oral motion for nonsuit. It is common when there is a lot of complexity or detail involved. The motion must state the grounds with precise details and requisite particularity to give the plaintiff a chance to remedy the deficiencies.

To ensure the motion follows proper form and procedure, it is advisable to check with the applicable arbitration rules from the arbitration case and the arbitrator's case manager.

Although courts traditionally disfavor nonsuits, particularly after an opening statement, they can be appropriate with no evidence of causation or libel.

Usually, nonsuit judgments are affirmed when the complaint does not refer to the same facts as the complaint, and no amendment is made. In addition, if the plaintiff's theory does not provide a legal basis for liability, the defendant's judgment of nonsuit is entitled. A motion for nonsuit can be denied if the opposing party's motion to amend the pleadings is granted and their pleadings are confirmed.

Understanding your situation

If you are served a notice of nonsuit, it may come as a relief. Even if it is “without prejudice,” chances are good the plaintiff does not have enough supporting evidence to pursue a claim against you in court. If the notice of nonsuit is “with prejudice,” you can breathe a sigh of relief that the case is over and cannot be brought again.

If you have been sued for a debt, protect your standing in the case by promptly filing an Answer to the Summons and Complaint. SoloSuit can help you create and file your Answer in a few easy steps. If a nonsuit or dismissal are unlikely, you can use SoloSettle to settle your debt for less than you originally owed.

If you have been sued by a creditor and do not have an attorney involved, educating yourself about your rights and responsibilities helps protect your rights and your financial future. Find out how SoloSuit can help you reach a positive outcome for your case.

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